Obama’s Energy Power Grab

The USEPA announced its intention to deliver yet another body blow to the power and petrochemical industries, piling on another layer of unneeded, unwanted and economically disastrous regulations to reduce emissions of greenhouse gases in the United States. Before we consider the agency’s latest move, let’s take a moment to consider all that has been done and will be done in the name of fighting the non-existent problem of global warming. States and the feds are already moving forward with at least six major regulatory programs designed to reduce the use of fossil fuels and thus decimate the energy sector:

New CAFÉ Standards – This is arguably the least bad of the bunch, because the due date for the new 35.5 miles per gallon Corporate Average Fuel Economy standard is at least a few years out (2016). Nonetheless, the new CAFÉ standard[1] will make automobiles more expensive – as even the White House admits – less safe (lighter cars don’t do as well in accidents as compared to heavier ones) and will do almost nothing to lower greenhouse gas emissions.

Renewable Portfolio Standards – More than thirty states, encompassing about three quarters of the population of the United States, have adopted Renewable Portfolio Standards[2]. These standards require using ever decreasing amounts of electricity generated by the combustion of fossil fuels.

Regional Trading Programs – States in three parts of the country, the east coast, the west coast and the midwest, have formed partnerships to create regional cap and trade programs. The east coast cap and trade program[3] has been up and running for two years. The west coast and midwest programs will “go live” in the near future.

Permitting of Greenhouse Gases – Recent USEPA guidance[4] directed state permitting authorities to treat greenhouse gases as regulated pollutants when considering the construction of new major sources and major modifications to existing sources. Permitting authorities are further directed to apply the Best Available Control Technology standard to the control of greenhouse gases from these sources.

New Ambient Air Standards – The USEPA’s new ambient air standards[5] for “traditional” air pollutants are so ridiculously low that it’s virtually impossible for any new facility to comply with them. This is thus a back-door way of ensuring that no new fossil fuel fired power facilities can be built.

New Hazardous Air Pollution Rules – The USEPA’s new rules limiting emissions of hazardous air pollutants from industrial boilers[6] are also draconian. Again, the net effect will be to ensure that new industrial boilers powered by fossil fuels are just about impossible to construct.

So, contrary to what environmental groups and leftist politicians would like you to believe, we’re already doing an awful lot to reduce greenhouse gas emissions and fossil fuel use – far too much in my opinion – and we will continue to pay the economic price for these disastrous policies. Yet, the USEPA isn’t content. They have decided to regulate greenhouse gas emissions under the Clean Air Act and that legislative framework demands the construction of even more regulatory layers. The latest will be New Source Performance Standards (NSPS) which will, for the first time, create numerical limits on greenhouse gas emissions generated by fossil fuel burning power plants and oil refineries.

Despite the use of the adjective “New” in the acronym, NSPS standards apply to both new and existing sources of air pollution emissions. Typically, the agency uses a specific date in time to distinguish between new and existing sources. Sources built before the cut-off date have one emission limit to meet and sources built after have a different, more stringent limit. Given the record of Lisa Jackson’s USEPA so far, we can expect that the agency will adopt greenhouse gas emission limits on existing sources that will force some facilities to close and the rest to spend billions in retrofits. And the new source limit? Expect that to be so ridiculously low that nobody will even think of building a fossil fuel fired power plant or new oil refinery in the United States ever again. Of course, given the list of the other onerous regulatory initiatives provided above, building new energy or petrochemical infrastructure is no longer a feasible option anyway.

USEPA announced its intention to develop greenhouse gas emission limitations for the power sector and oil refineries as part of two proposed settlement agreements[7] between the agency and several states and environmental groups who filed suit against the USEPA over greenhouse gas issues. As part of the settlement agreements, USEPA promises to have greenhouse gas emission limitations in place for the power industry by May 2012 and limitations on petroleum refineries in place by November 2012. The agency describes this as a “common sense approach” to reducing greenhouse gas emissions, and maintains that it is setting “a modest pace” in developing this massive new regulatory structure. More amazingly, USEPA administrator Lisa Jackson had this to say[8] about developing new greenhouse gas standards:

We are following through on our commitment to proceed in a measured and careful way to reduce GHG pollution that threatens the health and welfare of Americans, and contributes to climate change,” Administrator Lisa Jackson said. “These standards will help American companies attract private investment to the clean energy upgrades that make our companies more competitive and create good jobs here at home.

This is of course the same Lisa Jackson who believes that the Clean Air Act is solely responsible for American economic growth[9] over the last forty years. This latest statement by the delusional director shows that she’s drifted even farther into a green fantasyland. Eliminating America’s ability to use a cheap, domestically plentiful source of energy to power industrial growth isn’t going to attract a dime of private investment. Undercutting America’s ability to turn crude oil into refined products isn’t going to create one good job at home. Jackson is spinning yarns, utilizing all the right buzzwords, like threats to “health and welfare,” “attract[ing] private investment,” and “creat[ing] good jobs,” but those words are as hollow and meaningless as any ever uttered by the most cynical of professional politicians. The actions of Jackson’s USEPA and Congress’s continued unwillingness to rein her agency in guarantee that economic recovery and job creation will continue to be an impossibility as long as the Obama administration is in charge.